fah hospital policy blog

Perspectives on health policy affecting America’s hospitals and the patients we serve.

Category Archives: backstop

Senator Bennet Stands Up For Seniors, Rejects Medicare Cut

April 17, 2015 | FAH Hospital Policy Blog Team

Category: Backstop, Medicare

In a recent letter sent to the HHS Secretary, Senator Michael Bennet (D-CO) urges the Administration to reject a proposal that would harm low-income seniors by cutting Medicare bad debt payments to hospitals. This year, the Administration introduced a budget proposal for fiscal year 2016 that recommends drastic cuts to this critical Medicare provision, reducing these payments—currently at 65% reimbursement—over three years to just 25%.

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Senator Peters Urges Budget Committee Leadership to Protect Seniors & Hospitals

March 19, 2015 | FAH Hospital Policy Blog Team

Category: Backstop, Medicare

This week, Senator Gary Peters (D-MI) wrote to Senate Budget Committee leadership to express several concerns about proposed Medicare payment cuts in the Administration’s FY2016 HHS budget request. The letter specifically expresses strong concerns related to a proposed drastic cut to a critical program known as Medicare bad debt, which hospitals depend upon to continue providing high-quality care for Medicare beneficiaries.

Senator Gary Peters joins Senators Roy Blunt and Marco Rubio and many others in urging policy leaders to preserve the current Medicare bad debt payment rate to protect seniors who would be hurt by cuts to this program.

Medicare bad debt payments have been part of Medicare since the program’s inception in 1966. Congress created this “backstop” to protect access to care for low-income seniors who struggle to meet their cost-sharing obligations, which are determined by the government. In recent years, the Medicare backstop has been cut—taking what was 100% reimbursement for uncompensated Medicare cost-sharing, and cutting it substantially—to 65%.

In this year’s budget, the President proposes cutting Medicare bad debt payments to hospitals even more substantially to just 25%.

In his letter, Senator Peters explains why maintaining the backstop at its current level is so critical to seniors and hospitals in Michigan:

“Unlike private health insurance providers, hospitals cannot negotiate with Medicare to cover the costs of their patients. Michigan hospitals assume approximately $200 million dollar in uncompensated care for seniors annually…The cuts will hurt hospitals that service a high percentage of low-income seniors in traditionally underrepresented communities.”

By defending the Medicare backstop, Senator Peters is standing up for low-income seniors in Michigan and across the country. The FAH thanks him for his efforts to protect seniors and the hospitals that care for them 24/7/365.

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Senator Roy Blunt Urges Administration to Protect Low-Income Seniors

March 18, 2015 | FAH Hospital Policy Blog Team

Category: Backstop, Medicare

In a letter sent this week to the Department of Health and Human Services, Senator Roy Blunt (R-MO) urges Secretary Sylvia Burwell to reconsider the Administration’s proposed budget cut to a critical program for hospitals that care for low-income seniors, commonly referred to as Medicare bad debt payments. Senator Blunt joins and many other members of Congress from both parties working to protect access to care for low-income seniors.

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Representative Morgan Griffith Calls on HHS to Protect American Seniors & the Medicare Backstop

March 10, 2015 | FAH Hospital Policy Blog Team

Category: Backstop, Medicare

In a letter to Secretary Sylvia Burwell, Representative Morgan Griffith (R-VA) urges HHS to preserve the Medicare bad debt program (also known as the backstop), which help seniors maintain access to vital hospital care by paying hospitals 65% of the cost of Medicare beneficiaries’ unpaid cost-sharing obligations. In his letter, Representative Griffith calls for no further cuts to this foundational pillar of the Medicare program. He also explains the very real impact that Medicare cuts have already had on his constituents.

“I represent a rural district in Southwest Virginia with a very high proportion of low-income residents and seniors citizens. Many of my hospitals are barely breaking even and are classified and Low Volume and Medicare Dependent.”

“In fact, I have had one hospital that closed its doors because of these issues. I do not want to see others follow suit, which would further the access problem that exists in my district.”

Representative Griffith’s district has experienced first-hand the consequences of Medicare cuts, which affects access to care for all patients and compels patients to travel further to receive critical care.

Bad debt reimbursement has been a fundamental part of the Medicare program since it began more than 50 years ago. Since then, the Medicare “backstop” has been cut from 100% reimbursement to just 65%. The President’s FY16 budget calls for a harsh cut—to just 25% reimbursement for Medicare backstop payments over three years. This would leave hospitals responsible for carrying 75% of the financial burden for those patients who cannot afford their cost-share.

The Medicare “backstop” is meant to protect these vulnerable seniors and the hospitals that serve them. However, hospitals’ already heavy financial burden only continues to grow with unsustainable cuts. There is no clearer an example of this than the situation occurring in Congressman Griffith’s district.

The FAH applauds Representative Griffith’s effort to protect America’s seniors and protect patient access to care. Cutting the Medicare backstop threatens access to care for all of our patients. We continue to urge policymakers to protect Medicare beneficiaries, the hospitals that serve them, and their communities by rejecting any further Medicare bad debt cuts.

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